The recent decision in the Uber worker status legal case has important practical lessons for businesses.
The judgment of the US Supreme Court upheld the view that Uber taxi drivers were not self-employed contractors; they were ‘workers’. A key determining fact in the veridct was Uber’s extensive control over its drivers.
‘Worker’ is a specific status in employment law which brings the right to a minimum wage, holiday pay, and other legal protections.
Significantly, the judgment emphasised the importance of starting not with the written agreement (if any) between parties when establishing employment status, but with the purpose of the relevant employment legislation. This exists ‘to give protection to vulnerable individuals who have little or no say over their pay and working conditions because they are in a subordinate and dependent position’. Which means that employers – who are ‘frequently in a stronger bargaining position’ – cannot simply contract out of such protection.
The gig economy and beyond
The Uber case relates to the gig economy, but it has wider-reaching practical implications. The verdict should inform thinking generally around the use of non-standard working arrangements – for those who automatically identify themselves as employers as well as those who don’t.
The cost of having to reclassify members of your workforce can be high. So it is well worth checking that anyone in a non-employee role has been appropriately classified and that contracts accurately indicate the reality of the working relationship.
If you would like any advice on the matter of employee status, please contact our Lead HR Consultant, Diane Johnson.